Full text: Sir Andrew Turnbull's speech

I have been talking to a variety of audiences about civil service reform several times a week for three years. So this occasion provides an opportunity to draw the threads together, to see how far the civil service has come, and where it now stands.

When one is given the privilege of leading an organisation like the civil service, one builds on the work of predecessors and hopes to leave the organisation in better shape. One must go beyond the full repairing lease that Mrs Thatcher referred to in her famous environment speech. This responsibility has been accepted by successive governments.

"No government owns the public service. It must remain a national asset that services the national interest, adding value to the directions set by the government of the day. The responsibility for any government must be to pass onto its successors a public service which is better able to meet the challenges of its time than the one it inherited. My government clearly accepts that responsibility."

Though these sentiments were actually expressed by John Howard of Australia, they are fully endorsed by our prime minister.

The British civil service enjoys an excellent reputation and it is particularly admired abroad. I have received many visitors seeking to learn what we are up to and we have many imitators. I particularly enjoyed the straight crib of the Citizens' Charter at Windhoek airport.

Yet it also has its detractors and critics, particularly at home. I have reflected on this and have come to the conclusion that the civil service has been strongly shaped by the Northcote-Trevelyan report and the traditions which have developed from it, but that this has also given rise to many of the features which people find unsatisfactory.

The Northcote-Trevelyan report grew out of the clash between a growing state and an administration based on nepotism. It recommended a series of changes, which have shaped the organisation even to this day.

These were:
A permanent and impartial civil service;
Accountable to ministers who are in turn accountable to parliament;
Recruitment and promotion on merit;
Based on self sufficiency, ie largely developing its own talent with a presumption of one employer for a whole career;
Providing services from within with little outsourcing;
Highly federal, organised into departments each of whom has a secretary of state accountable to parliament

What we get from this is a well organised service, attractive to able people who wish to develop a long-term career. The transition costs between governments are low, knowledge and experience are retained. Our values are developed and passed on, producing a high integrity organisation. It produces a service highly competent at managing the processes of government such as policy development, legislation, international negotiations and, as we saw three weeks ago, crises. It is an economical service too; as Northcote and Trevelyan noted, recruiting people early in their careers is cheaper than attracting them from the market.

Apart from some interruptions during the two world wars, the civil service was a more or less like this for the first 140 years of its existence until change started in the early 1990s.

We should recognise, however, that the UK model is an extreme. Permanency goes right to the very top. There are virtually no changes at the time of an election. The other end of the spectrum is the Communist state where one has to be a Party member to hold even minor public office. Among democracies the US is probably at one extreme, the top three or four tiers rotating with each administration. This is not a system I like but one has to acknowledge that within the wider framework with which it operates, there are three checks and balances:

There is pretty regular political rotation, not least because a president can serve no more than two terms;
There is a well developed network of places where the outs go while waiting for the call to return, so their expertise is to some degree preserved;
Many of the senior posts are subject to congressional confirmation by Congress.

But giving the power of hire and fire which a US president has to a British prime minister backed by a three-figure majority in the House of Commons would be something quite different.

In Australia, though it is apparently quite close to us, there is in fact significantly more political influence over the appointment of secretaries (sensibly they have dropped the claim to be permanent some years back). Another system, which I dislike, is that in France in which formally people serve in one organisation but there are informal political allegiances, ie politicisation without the transparency of the US system to go with it.

My conclusion is that our system has served us well and anyone contemplating change should beware of importing bits of other systems without thinking through the implications for the system as a whole.

But the benefits of the Northcote-Trevelyan tradition, and they are huge for the UK as an economy and society, come with a price.

The civil service has historically been more focused on policy and administration than delivery, particularly for those services that are delivered through others such as education, health and law and order;
The structure has been hierarchal and inflexible and cross departmental working has been difficult;
The reward system was based on slow maturing careers with long pay scales and final salary pensions;
It has changed, but not rapidly enough;
For too long the civil service was a closed world, limiting its ability to attract talent and the outside world's understanding of it;
It has been too reliant on the skills of those recruited many years earlier, leaving it underpowered when requirements changed;
It has drawn on too narrow a slice of the nation's talent;
Little priority was given to developing leadership;
It has been slow to take full advantage of outsourcing and to equip itself to manage large projects
Incentives to improve efficiency were weak, both for the organisation or for individuals.

So what have I and my colleagues been doing to respond to the concerns expressed?

We no longer claim a monopoly over policy advice. Indeed we welcome the fact that we are much more open to ideas from thinktanks, consultancies, governments abroad, special advisers, and frontline practitioners. In developing policy we not only consult more widely than we used to but involve outsiders to a far greater degree in the policy making process, eg the extensive use of outside reviewers - Turner, Eddington, Sandler, Higgs, etc. The teams which the strategy unit puts together are highly multi disciplinary.

Some commentators regret the fact that permanent officials no longer occupy the dominant place they used to. In response let me quote my Australian counterpart, Peter Shergold:

"Let me make it clear that I extol the fact that public service policy advice is increasingly contested. I welcome it intellectually: our perspectives and strategies benefit from challenge. I also welcome it professionally, as a public servant. In my view, more ministerial advisers does not represent the 'politicisation of the APS', still less the demise of an independent public service or undermining of the Westminster tradition.'

Let me give you two examples which question the existence of a golden age in which civil servants led the policy process, unlike today when special advisers are alleged to dominate.

The first was the selective employment tax, introduced in 1966. It was the brainchild of a special adviser, Lord Kaldor. Nikki was a remarkable and an inspirational teacher. He had the ability to get hundreds of economics students, such Hayden Phillips, John Eatwell and myself, out of bed first thing on a Saturday morning to hear his lectures. This was the only time he was available as he was working in London during the week. When I met him later in the Treasury as a special adviser, working with him was extremely stimulating. But the SET was a nonsense which tried to hold back the tide of economic history. It represented an extra tax on employment in the services sector which came to represent the most dynamic part of our economy.

For those who believe that policy making is not what it was, I contrast the special adviser devised SET, and the untested theories upon which it was based, with the Treasury's analysis of the five tests for joining the euro published in June 2003. This was thorough and evidence-based, drawing on a wide range of outside advice. Above all it was correct in its conclusions and there must now be many countries in the euro who wished they had undertaken such a comprehensive study, either to inform their decision to enter or to inform the policies needed to make it a success.

But I digress from the theme of reform. Other components of our reform programme have been:

The professional skills for government initiative will, I believe, turn out to be a historic change. We are engaged in serious upgrade of our professional skills. Instead of our division between "specialists" and "generalists", we will give parity of esteem to three career groupings - policy delivery, corporate services and operational delivery. We will define the skills and experience needed for each;

We are strengthening performance management;

We analyse and manage risks much more thoroughly;

Departments now attach much more importance to preparing real well thought out strategies;

We organise both our policies and our structures with much greater focus on the customer, eg the Department of Work and Pensions, which is now organised around two broad client groups;

We have opened up our recruitment to people in mid-career as well as straight from school or university. Hence the phrase with which I am now eternally linked "a permanent civil service not permanent civil servants". One in five senior civil servants have been recruited from outside. This has given us a tremendous injection of talent and promoted greater understanding between the civil service and the world beyond. This too is an example of risk taking. Recruits from outside can sometimes let you down, but the upside of a successful appointment can be massive;

We have improved our diversity but recognise we are still a long way from where we need to be. [In the year I took the faststream entrants exams only 22% of the successful candidates were women. Last year that figure was 42%;]

We now take leadership development seriously and have created a number of training opportunities which relate to each step in one's career. We have improved leadership training. Indeed we are pioneering a development centre for permanent secretaries. Last month I launched the new National School of Government. We have shed our inhibitions about mentoring and coaching. Our arrangements for succession planning and for the identification of high potential people draw on private sector best practice;

We have set up a number of Centres of Excellence to raise standards in procurement and project management, communications, hr and finance and the exploitation of information technology (ICT). Setting up the OGC was one of the best things I have ever worked on;

We are accelerating our programme to transform the delivery of public services through ICT. Unheralded we have migrated 13 million benefit recipients from paper to electronic payment. The next two years will see huge further advances;

We have shed the presumption of in-house provision and are now harnessing the private sector through private finance initiative and outsourcing, to get not only the inputs we need but also to provide services direct to customers;

We are on track to deliver a major efficiency programme.

It is my contention, but your verdict, that the civil service has made huge advances in recent years. But you may ask what is distinctive about the most recent changes. The first is the focus on delivery and the broader canvas on which we seek to deliver; the second the effort to address whether we have the right people and skills to achieve our goals.

There are times when change takes place, and it is obvious that it is historic. There are others where full implications of what is happening are not fully grasped at the time. An example of this was in the summer of 1998 when the Treasury was looking for a way of signaling that the Comprehensive Expenditure Review was a "something for something" deal, ie departments were given a three-year spending allocation in return for committing themselves to deliver certain specified outcomes.

Following the establishment of Public Service Agreements in 1998, departments' ambitions are now defined not at the boundary of the department itself or its agencies but as a wider outcome much further beyond its boundaries. Department for Education and Skills is seeking outcomes at the level of schools, or even seeking to influence the behaviour of parents, whether they send children to school in the first place. Department of Health is seeking improvements in health such as the reduction in death from cancer, and to improve some indicators of quality of service such as waiting times. Home Office is seeking a reduction in crime, ie a change in behaviour in society itself. The effect has been to change the focus from delivery by a department itself to the much more difficult challenge of involving all the providers in the long chain of delivery - teachers, doctors, police, courts etc. No longer is it enough to frame the legislation, agree the funding and then issue circulars and guidance in the hope that things will happen;

With PSAs came framework documents and targets, previously applied successfully by a department to its agencies, but now applied to all the players in the delivery chain.

The application of targets to wider outcomes across a longer delivery chain has proved controversial. It has been criticised by some as too top down, demeaning professional standards, encouraging gaming, undermining trust, distorting priorities. Baroness Onora O'Neill has put this case with great eloquence.

There is another side to the coin, put equally eloquently by Julian Le Grand in his excellent book "Motivation, Agency and Public Policy - of Knights and Knaves, Pawns and Queens". In it Julian questions whether it is safe to assume that knightly professionals, left to their own motives, will produce high quality and continuously improving public services. Or whether it is more likely that they will produce service of a level that they consider is good, but which in fact represents a comfort zone.

The GP's surgery is a good example. Historically it has been highly valued but ultimately it involves attending a GP at a place of his or her choosing (usually near where you live) at a time of his or her choosing. For some, eg those who need a long term relationship with a particular GP, this fine; but on other occasions it is a huge inconvenience. We have to ask whether state hospitals, state schools , and state housing, and the criminal justice system, all largely left to the professionals for much of the postwar period, did in fact improve as they should have done.

The proponents of targets argue that they provide focus, ambition, transparency, a basis for management intervention and accountability. Without targets it has to be asked whether waiting times of over a year would really have been a thing of the past. Would the reduction in asylum claims, which rose to eight thousand a month in autumn of 2002, now stand at under two thousand? Would the improvements English and Maths in primary schools have occurred? Would street crime have come down and the number of ineffective trials been reduced?

In short, there has been sustained pressure through the use of targets to push professionals (and I include civil servants in this) out of their comfort zones, to focus their efforts, to require them to work more closely with others in the delivery chain, to accept redefinitions of professional demarcation eg classroom assistants and community safety officers.

The past has been controversial, but I detect a greater degree of consensus going forward:

Targets need to be refined, with greater involvement from frontline professionals and greater emphasis on agreed outcomes. This is important not simply to get buy-in but also to get the frontline practitioners readier to acknowledge publicly improvements in their services, an important component of reducing the perception gap;
validation of performance needs to be improved to raise public confidence;

Accountability needs to move downwards with greater voice for users, greater choice for users, and more personalisation.

In short we have to reverse polarity. Accountability has hitherto been largely upwards. Even concepts such as new localism, earned autonomy, freedoms and flexibilities, are still only variants of the upward accountability model, where the organisation at the top decides what the tier below needs to do to earn what privileges. Going forward, users need to have a greater say in setting standards and enforcing them either by using power of voice or by the power to move their custom elsewhere.

In addition to the greater focus on delivery, the second difference from early initiatives to reform the civil service has been the emphasis on greater capacity/capability. As well as adopting better systems, we also ask ourselves whether we have the right people with the right skills, and leaders with the right experience and confidence, with the right tools and premises to do the job.

When Mr Blair became prime minister in 1997, he found in the Cabinet Office the traditional secretariats responsible for managing and coordinating government business, a number of units responsible for propriety and ethics, plus an HR function still vested in administration rather than development. In No 10 he found a small private office and a small communications function but one dealing only with news and one with the national media. The leader of the large organisation would expect to find far more than this at its centre. He was entitled to ask "is that it?"

There was no central strategy capability, little ability to harness the use of IT across government, no central procurement capability, nor one for project management, no effective mechanism to pursue delivery of the government's objectives, and no capability to develop proper two-way communications with frontline staff and the users of public services.

These shortcomings have now been addressed and centres of excellence set up for each at the Strategy Unit, e-Government Unit and so on, each led by an experienced and respected practitioner. And each is responsible for identifying the skills needed, working with departments to raise their own capacity while taking on those functions which it makes sense to do at the centre. In parallel the Treasury is developing the finance and accounting capability across government.

Values

Let me now turn to the question of values. Northcote-Trevelyan expressed concern that "the public service suffers both in internal efficiency and in public estimation", ie they recognised 150 years ago that the civil service faces two threats to its reputation. It has to be good, embodying high standards of propriety and integrity. We now know quickly the reputation of a brand can evaporate. But to sustain its reputation it also has to do good. If it is good but ineffective, the public and the politicians will turn to other sources of advice, other means of delivery; and it will not maintain its ability to attract people of talent.

Emphasising the importance I attach to the civil service being capable of delivering the tasks set for it, I have in no way sought to downplay the importance of values. Nevertheless I have been accused by some of not taking values seriously enough, as evidenced by the fact that I have not seen a civil service Act as a priority, though I would guess that it commands an overwhelming consensus in this room.

I have always thought that the proponents of a Civil Service Act had completely unrealistic expectations of what it would achieve. Most of the problems that concern people would not in my view have been addressed by such an act while some new problems would be created.

When things have gone wrong at the interface between the civil service and politicians they have nearly always been around values and behaviour, not rules and enforcement. For example, I do not see how what PASC called "These Unfortunate Events", at DTLR would have been influenced one way or the other by the existence of a Civil Service Act.

I recently met the Mexican minister for public sector reform. When I congratulated him on producing a Civil Service Act within three years, he looked at me enviously and said. 'Yes but you have 150 years of values'. I was struck recently when I read of the new chief executive of Boeing who arrived from Hewlett Packard. He said he was dismayed to find an organisation that was rules rather values driven.

By contrast I believe that in some respects an act as drafted by the PASC would do actual harm. One of the provisions of their draft was that the minister may make provision by statutory instrument:

Prescribing the number, grading and classification of posts in the civil service;

Determining the conditions of service of all persons employed in the civil service, including remuneration, expenses and allowances, holidays, hours of work, part-time and other working arrangements, retirement, redundancy and redeployment;

Regulating the conduct of the civil service, other than the civil service code or other codes under section see above; and

Regulating recruitment of persons to situations in the civil service, including qualifications relating to age, knowledge, ability, professional attainment, aptitude and potential.

(2) An order under this section should be subject to annulment in pursuance of a resolution of either house of parliament".

The argument which the PASC put forward for this is that "it is simply a way of ensuring that both houses are properly informed about the operation of service for which they vote the funds". There is a much simpler way of obtaining this information and that is to ask for it.

In my view this is totally misguided. As a practical matter, turning all our structures and terms and conditions into statute could only be done with a much more centralised system than we have at present. It would remove one of the sources of strengths of the UK civil service which it is that it has flexibility to adapt. Those leading the reforms of the civil services in countries like France and Italy are deeply envious of our ability to implement change quickly and flexibly.

Equally, I do not see how keeping politics out of the civil service is best served by giving parliament a role in its detailed management. In any case parliament should be holding us to account on the outcomes we achieve, not details of our internal management. This clause is not in the government's draft bill, but if its addition were one of the conditions for securing passage of an act then, I would have to say 'Thanks but no thanks'. It is ironic that some of the supporters of the act are those who complain that the government is too ready to resort to legislation.

If, as I believe, a Civil service Act is likely to disappoint its champions and could bring unwanted problems, what then should we be doing to entrench our values? There are a number of provisions in the two draft Acts, (PASC's and the government's) which can be implemented on a non-statutory basis and our approach has been to adopt these where ever possible:

The position of the first civil service commissioner has been strengthened by undertaking that the leaders of the main opposition parties will be consulted on the appointment;

In addition the first civil service commissioner has herself strengthened her office by appointing a panel of a dozen or so commissioners, all with serious public reputations - something that is now also proposed for the commissioner for public appointment;

The increase in the number of open competitions means that more civil service appointments now come within the jurisdiction of the civil service commissioners;

We have worked with the commissioners to increase understanding of the civil service code, especially for new entrants, and to increase understanding of the role of nominated officers to assist in the resolution of disputes;

We are now working on a joint project with the civil service commissioners to look again at the civil service code to see if it needs to be updated and in particular if it can be written in a way which is accessible to more than the cognoscenti of the Armstrong Memorandum;
we have updated the ministerial and special adviser codes,

If there is to be a Civil Service Act my message is:

Be realistic about what it will achieve;

Use it to underpin the existing constitutional settlement rather than to change it;

Put most of your effort into values and behaviour.

The theme of special advisers runs through the work of the committee on standards in public life (CSPL). They acknowledge the need for special advisers to work collaboratively with officials but in practice many of their proposals seek to ghetto-ise them. I have met objections to the proposition that special advisers should be able to request papers from officials rather than going through a process like the request for the royal piece of toast in which a special adviser asks the private secretary who then asks officials who return the material to the private office and hence back to the special adviser.

My approach has been that ministers, special advisers and officials are three parts of a triangle, each with separate roles, each respecting that of the other. There is nothing worse than a special adviser who sticks like a limpet to the minister, feeding his prejudices and paranoia, largely ignorant of the work of officials. The key element is trust. This is not, in my view, achieved if traffic does not flow freely along all three sides of the triangle.

To allow this to happen, I personally drafted what I saw as a key omission from the old special adviser code, ie how special advisers should interact with officials. Getting special advisers to understand this and live with the principles will achieve more than setting a limit on their numbers or putting their existence on to a statutory basis.

I make three appeals to the CSPL. First. Please set aside the thinly disguised hostility which pervades much of your thinking about special advisers. Secondly, please think constructively about the way special advisers, as an important resource for ministers, can work more effectively. Thirdly, please go and visit some departments to see how special advisers are working day to day.

Our system is undoubtedly delicate and subtle. The borderline between what civil servants do and do not do is very fine. For example on the one hand we frequently present ministers' case, eg why they think the policy they are following is right in the circumstances to the media, to select committees, and to stakeholders. On the other hand, we should not praise a policy in a way which could be held to imply support for the approach of the party in power, or undermine the opposition's confidence that we would serve them with equal commitment. This is a difficult line to draw, even for experienced civil servants, let alone people recruited from outside. Occasionally civil servants do stray off side, as do ministers and special advisers. But this does not happen often.

How is this borderline policed? To some extent by the civil service commissioners, the committee for standards in public life, the PASC and by a corpus of "soft law" enshrined in various codes hence the emphasis I have placed on increasing understanding of the civil service code. But principally by values and culture which are handed down through generations of civil servants, which now have to be inculcated into special advisers and into those recruited in mid career.

Conduct of business

Much has been written about the conduct of government business so may I take this opportunity to record a few facts.

The way cabinet works has changed significantly in my time in the civil service. Interestingly this change is not exclusive to the last eight years. In 1975 cabinet met 56 times and received 146 memoranda. By 1990, Mrs Thatcher's last year, cabinet met 40 times and received only 10 papers. Most of the formal decision making had been moved either to cabinet committees or to ad hoc groups under the prime minister's chairmanship. In 2002, the year I came into this job, cabinet met 38 times and received 4 papers and 1 presentation.

Since then there have been a number of developments:

Cabinet now regularly receives presentations on major new policy developments. For example five-year strategies published by the main departments were presented in this way. Provided the actual text of the document is also circulated to a cabinet committee or in correspondence, I think it is a good thing that ministers respond by exercising their political judgment rather than reading from the departmental brief. In 2004 cabinet met 38 times and receiving 9 papers and 23 presentations;

After the last election a significant reorganisation of the cabinet committee structure was announced, providing separate committees for the prime minister's priorities eg health, education, antisocial behaviour, where these were previously taken through an all-purpose domestic affairs committee or through ad hoc meetings. Changes were made to membership to ensure that as far as possible committees were chaired, either by the prime minister himself or by other neutral chairs, rather than the minister with the policy lead.

We are now circulating for the first time with the cabinet agenda a note listing the committees which met the previous week with a summary of the outcome plus the committees scheduled for the following week with the agenda. This is designed to allow a minister not on a particular committee to intervene if they have interest which has been overlooked.

This is a subject on which views have become polarised and entrenched. All I ask is that those that who proclaim the demise of cabinet and its committees should retain both some historical perspective and recognise that the style in which prime ministers conduct business ebbs and flows over time. The history of the first Wilson cabinet for example tells you that not everything came out of the Cabinet Office manual. As the Butler report stated:

"we do not suggest that there is or should be an ideal or unchangeable system of collective government, still less that procedures are in aggregate any less effective now than in earlier times."

I suggest that one needs to look also at the outcomes of the way government business is conducted, something I will return to at the end.

Let me conclude with some personal reflections on the most significant events of my career, and some issues I am leaving unresolved.

Unresolved issues

I am proud of the organisation that I am leaving to my successor. But although I have seen much change over my tenure as cabinet secretary, I know that there will continue to be changes after I have left. There are three particular issues that I am sorry to be leaving unresolved

First, the issue of civil service pay, particularly at senior levels. The theory is that our pay is market facing, designed not to match best of the private sector, but for the target rates for each grade in the senior civil service to be about 80% of the private sector median. There are two problems with this theory:

I recognise that setting pay for a group who work close to the political interface is difficult. But the failure to address it will mean one of two outcomes:

That the civil service cannot recruit the talent it needs, whether from the private sector or the wider public sector or;

The two-tier pay system which is emerging becomes even more pronounced and eventually indefensible.

The second is the issue of the pension age. There seems to be agreement that new entrants should be recruited on the basis that their pension age is 65, but the position of existing staff should be preserved. But it is not sustainable in my view, to argue that we must preserve the right of 25-year-olds we have recently recruited to retire at 60 in 2040.

The second part of this issue is the final salary pension scheme. This needs to change if only for the reason that as we work longer our final year may well not be our best. I well understand the FDA argument that this is the only bit of "smooth" in SCS remuneration package. But I do not believe it is right or sustainable to shore up an unsatisfactory pay system by appropriating a cross-subsidy from the pensions of junior staff, early leavers and late joiners. Two wrongs do not make a right.

My final regret is that we have still not laid to rest some of the old stereotypes, eg mandarins and bureaucrats. I haven't seen a bowler hat in Whitehall for 25 years. As for labelling civil servants as bureaucrats I find this comment inaccurate and offensive.

In my many visits as head of the civil service, I have been fortunate enough to meet civil servants engaged in a wide range of different tasks. I have met people who provide benefits to pensioners; who help the young people with few skills and even worse attitudes get into work and so become productive citizens; who run our courts and help witnesses through the daunting experience of giving evidence; who equip and supply our armed forces in the field of battle; who help ministers to develop their policies and account for them in parliament; and finally all those who collect the taxes to pay for all of this.

My civil service colleagues have played many other important roles - for instance the coastguards who in the floods at Boscastle put their lives at risk to rescue others; or those who have helped set up the centre for families bereaved by the July 7 bombs. The prime minister and the chancellor can rightly take credit for changing the commitment of the rest of the G8 to tackling the problem of poverty in Africa. In this historic endeavour, they have been supported all the way by our civil servants and diplomats.

It has been a privilege to serve alongside these thousands of civil servants who, in their different ways, have served this country with commitment and integrity.

Significant events

First, in 1984-85, when I was in No 10, I worked almost full time in the miner's strike. Its end established two principles which changed the course of our history - that economic change could not be resisted, and that undemocratic trade unionism had no place in Britain. Had the outcome been the other way, the course of British politics would have been completely different and our economic revival would have been suppressed or at best delayed for many years.

Secondly, out of the wreckage of the Exchange Rate Mechanism, I worked on building a macro-economic system which is admired around the world:

Regular meetings to discuss interest rates;

Proper documentation presented to those meetings (it seems amazing nearly a decade and half later that that was not the case before);

An inflation target;

Minutes of meetings and explanations of interest rate changes;
un-muzzling of the Bank's Inflation Forecast.

It was on these foundations that Gordon Brown built operational independence for the Bank of England, the separation of responsibility for monetary policy and financial supervision, and the separation of the responsibility to market the government's debt. In addition, of course, he also created a set of fiscal rules.

Thirdly, I worked closely on ending the constitutional nonsense under which a minister in the cabinet responsible for administering a large part of the criminal justice system was also a judge and the presiding officer of the House of Lords. I accept that there was a failure of presentation at the time but the substance of the proposals has proved sound. We will soon have a proper process for judicial appointments, with carefully worked out understandings about the extent of the minister's discretion, and clear identification of the Lord Chief Justice as the head of the Judiciary. We will also have a supreme court so that those who increasingly sit in judgement on the actions of the executive, as in the Belmarsh case, do not sit as part of the legislature. I was delighted to see that the House of Lords has just agreed to take up the offer to choose its own presiding officer.

Fourthly, despite the unresolved problems about local government finance and responsibilities, I take great satisfaction from the improvement in the working relationship between civil service officials and local government officers. The result has been mutual parity of esteem, in which we recruit actively from them and they from us.

Lastly, when I took up this appointment, I identified that, post 9/11, we needed a very senior post to develop a counter-terrorism strategy and to build up on resilience to terrorist attack and to other threats, rather having the cabinet secretary dealing with these matters inevitably on a part time basis. The ISC was initially a bit sniffy about this and I took some criticism either for evading important responsibilities, or some have contended, weakening the service provided to the prime minister. After the response to the events on 7 July, which drew heavily on the work of David Omand as Intelligence and security coordinator and of his successor Bill Jeffreys, I now feel vindicated.

Let me end with a few thank yous. First to my many civil service colleagues who give this country strength and integrity. Then to my permanent secretary colleagues who have provided strong and consistent support and who have taken up the cause of civil service reform with enthusiasm.

I am also indebted to the civil service commissioners, and in particular Usha Prashar the first civil service commissioner, who have embraced the reform agenda while retaining their role in upholding our values.

I have admired the seriousness with which the PASC have pursued a variety of issues on the performance and governance of public services. In particular, I want to pay tribute to the courtesy with which its chairman, Dr Tony Wright, has conducted its proceedings.

Finally, as I reflect on 37 years in the public service - two working for the government of Zambia, two for the IMF, 19 working for a Conservative government and 14 for a Labour one - I see a country transformed for the better from the time I joined in 1970.

In the early 1970s, the government of the day was unable to exert its authority and trade unions were rampant. The management of the economy was a failure and our G10 partners had to organise a whip round to keep us afloat until an IMF programme could be organised. Our micro-economic policies were not working and we were growing more slowly than our principal competitors. Having failed to join the EU at its inception we were inevitably playing catch up. We were pitied and mocked by our allies.

Now I see a country whose image and self image are transformed. Our economic performance is one of relative improvement rather than relative decline. We are making the running on the debate about the future of Europe and have just led the G8 to improve its contribution to aid and debt and to increase its commitment to Africa.

All this has not come about by accident, but by the sustained exercise of political leadership over 30 years, by politicians on both sides of the political divide. They deserve enormous credit for this. So my final thank you is to them. I am proud to have been associated with them in this endeavour.